Oxford, London and Aberdeen among top cities for small businesses
Cities have the highest density of 'new work' creative and digital start-ups and rank highest for jobs growth, pay and productivity
Oxford, Cambridge, London, Reading and Aberdeen are ranked among the top 10 British cities for productivity, jobs growth and average earnings, according to the Centre for Cities’ Small Business Outlook 2015.
The report of 64 cities found those that ranked highly on these metrics tended to have a higher density of small businesses in professional, creative or digital sectors – known as ‘new work’ companies.
These five cities have the highest average concentrations of ‘new work’ businesses in the country, with the capital accounting for 29% of all businesses in ‘new work’ sectors and 20% of small businesses overall.
The highest density of ‘new work’ businesses tended to be found in cities in the South West with the exception of Edinburgh, Warrington and Aberdeen; the latter boasting the highest job creation from ‘new work’ sectors of anywhere in the country.
Reading had the highest proportion of technology and digital firms relative to size, while London was found be home to 30% of all digital small businesses in the country. London, Oxford and Cambridge took the second, third and fourth positions respectively for the number of businesses in the creative industries.
The report found that ‘new work’ businesses tend to locate where there are large talent pools to hire from, with Reading listed as having the seventh highest proportion of graduate residents. Similarly, cities with a high concentration of digital and creative businesses, such as Oxford and Cambridge, were more likely to have high quality universities, with those businesses often working closely with the universities.
‘New work’ small businesses are more likely to have international operations, rather than relying on local markets – up to 51% of businesses in Cambridge were in ‘new work’ sectors and 32% of all businesses in the city trade internationally.
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Alexandra Jones, chief executive of Centre for Cities, said: “In recent decades, small innovative firms, taking advantage of technological advances, have started to play an increasingly important role in driving jobs growth, wages and productivity in UK cities.
“Helping these firms to grow should also be a top priority for the government in its efforts to rebalance the national economy, including the Northern Powerhouse initiative. Most importantly, the government needs to give cities greater control over skills, infrastructure and spending, to help them become more responsive to the needs of local businesses.”